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Mill management flayed for poor financial performance

Staff Reporter

“Steps not taken to augment production”

PUDUCHERRY: Representatives of the Federation of Anglo French Textiles Unions on Tuesday flayed the mill management for not taking enough steps to augment the production capacity and set in motion the modernisation plan.

Coming down heavily on the management for “returning a government order worth several crores of rupees” to produce clothes for free distribution during the Pongal festival, president of the federation V. S. Abhishekam said the management had lost a good opportunity to get additional revenue at a time when the mill was in “severe financial crisis.”

He said the mill management had agreed to manufacture polyester clothes before the festival. The management did a “U-turn” and informed the government that “it did not have the time to manufacture the goods.”

National Council member of the Communist Party of India and chairman of the committee constituted by the government to monitor the procurement of clothes for free distribution R.Viswananthan said that the mill management backtracked on the issue of supplying the materials. When the order was placed a few months ago, they had agreed to provide the clothes on time, he recalled.

Mr. Abhisekam alleged that the move by the mill authorities to drop the order was to help the government to procure the materials from the open market. The management’s decision to abandon the plan to supply the goods came at a time when the mill was incurring heavy losses over the last few years, he said, adding that its annual turnover had slipped to Rs 75 crore from Rs 120 crore that it used to make 14 years ago.

The union representatives said the “techno-economic viability report” prepared by the South India Textile Research Association (SITRA), appointed by the government to identify the causes for the “poor performance” and suggest measures for improvement, had rated the financial performance of the mill as “poor”. According to them, the report had said the mill incurred an operating loss of around Rs 17.30 crore every year, which was about 22 per cent of the sales income and a net loss of Rs 21.83 crore annually during the period from 2003 to 2006, the union representatives pointed out.

The mill had made an income of Rs 71.61 crore during 2005-06 which was about 35 per cent lower than the expected value, the report said. The SITRA report had attributed the low income to lower capacity utilisation and machine productivity in all the units and partly owing to low commercial efficiency, the leaders added.